Ashok Minawala |
The Indian government has deferred the implementation of the Gold Hallmarking Act, which was scheduled to come into effect on January 1. The Act would have made it mandatory for gold jewellery to be certified for purity at government testing centres in the four metropolitan cities of Mumbai, Delhi, Chennai and Kolkata. However, it has been postponed due to concerns raised by jewellers.
The All India Gem and Jewellery Trade Association (GJF), a group that represents about 300,000 jewellery retailers across India, said while it supports hallmarking in principle, there were several practical issues that had not been considered with regards to its implementation.
Some of the main objections from the Indian jewellery manufacturing and retailing industry are inadequate hallmarking infrastructure, the requirement of a licence for a jeweller to sell hallmarked jewellery and a number of legal loopholes.
Of the 56 operational hallmarking centres in India, only 25 are present in the four cities where the scheme is being implemented. Of these, 7 centres in Mumbai operate round the clock to cater to 627 licensed jewellers at present.
“In Mumbai we have a total of 12,000 jewellers,” said GJF chairman Ashok Minawala. “Will a hallmarking centre be able to handle about 1,700 jewellers per centre?” he asked.
The GJF argues that there are simply not enough testing centres, and bottlenecks in the system could significantly disrupt business in the world’s biggest gold-consuming market. It contends that the Bureau of Indian Standards (BIS), the designated nodal agency in charge of implementing the government’s hallmarking legislation, will need to open more than 500 hallmarking centres to cater to the 28,176 jewellers present in these four metros. Each centre requires an investment of up to Rs.2 crore ($507,614).
Jewellers oppose the requirement of a licence for every manufacturer and retailer of precious metal to sell hallmarked jewellery, saying it harks back to the days of the “licensing raj” and replicates the “the horrors of the Gold Control Act” (which restricted the amount of primary gold a company could possess at any given time to under 2 kg).
“The purpose of a licence is to identify the seller and the source of manufacture, to hold the jeweller responsible for a product and to bring accountability to the trade. If this is so, why should jewellers who sell hallmarked jewellery need to be licensed? The hallmark carries all those guarantees anyway,” Minawala said in an earlier interview.
Traders are also seeking exemptions for certain types of jewellery like jadau and kundan, saying they are non-homogenous and difficult to hallmark. Government officials have long argued that the numerous joints and alloys used for soldering traditional handcrafted pieces could be misused for cheating on gold content.
The GJF has also appealed that some of the penal provisions, such as imprisonment and fines for selling un-hallmarked jewellery, be toned down so that they only cover offenders who intentionally commit any offence.
Meanwhile, consumer affairs secretary Y.S. Bhave has said that the deferment of the hallmarking act is only temporary and it may be implemented very soon. |
